Jerry Seinfeld once spoofed a TV advertisement for a laundry detergent that boasted it could remove blood stains from your t-shirt. Seinfeld quipped that if you have blood stains on your t-shirt, you probably have bigger problems than how to remove them.
Not that anyone needs reminding, but it’s tax season. An ad running for H&R Block tax preparation services boasts that it has now employed the services of IBM’s Watson to solve your tax problems. Watson made a name for itself on the quiz show Jeopardy! in 2011 by beating out two human rivals and taking home a $1million prize. It probably spent its winning on a new set of circuit boards! At the time, it was reported that the artificial intelligence capacity of Watson could be had by anyone for the incredibly low price of $34,500.
With all due respect to the geniuses at IBM and the folks at H&R Block, that Seinfeld bit comes to mind. If you need Watson to do your taxes, maybe the problem isn’t with your lowly human brain capacity, but with the tax code itself. It’s been estimated by the IRS that it took some 6.1 billion hours for taxpayers to file their taxes in 2012, to say nothing of the carpal tunnel syndrome cases it produced.
The real problem is that the tax code is so complex that it’s nearly impossible for mere mortals to figure out. A current notion among so called tax reformers is that if the rates are flattened everything would be grand. The problem is that before you get to the rate you’re supposed to pay, you need to determine the amount of your income that’s taxable. Getting to that number is the trick and where the biggest complexity lies.
How much time have you spent calculating the amount of sales tax that you owe when you go to the store? Probably a lot less than the 13 hours reported as the average time an American household spends preparing its income tax return. In fact, probably none. It’s simple, easy, and transparent. You don’t even think about it.
Let’s get rid of income tax entirely and move to a consumption based tax system – the FairTax®. Give Watson the opportunity to cure disease, find habitable planets, and other big stuff like that. You deserve a break too.